House, Senate prepare to reconcile tax overhaul bills

Senate Republican Whip Sen. John Cornyn, R-Texas, talks with reporters outside the Senate chamber before a vote on a sweeping tax bill on Friday. The bill passed by 51-49, setting up a reconciliation committee to unify the bill with the Hose version. Photo by Erin Schaff/UPI | License Photo

Dec. 4 (UPI) -- House and Senate lawmakers said they will begin reconciling their tax overhaul legislation on Monday, the next step in completing the compromise legislation.

The Senate approved its tax plan early Saturday in a 51-49 vote. The House passed its version Nov. 15. The two competing bills must now be unified, or reconciled, to make them identical. The final bill will then go to the House and Senate again for votes, before it is delivered to President Donald Trump for his signature.

Congressional and White House Republicans have set a goal of Dec. 31 for the bill to become law.

If the process moves according to plan, Sen. David Perdue, R-Ga., said Sunday, the bill will be on Trump's desk "within 10 days."

The Senate version repeals the Affordable Care Act's individual mandate and modifies the death tax. Issues regarding which individual deductions are retained must also be decided.

House Majority Whip Steve Scalise, R-La., said, "If you look at the House and Senate bill, both of us are pretty close on that. There are some areas where we disagree."

The Senate bill offers a temporary tax cut for individuals through 2025 and permanently cut the corporate tax rate from 35 percent to 20 percent. The temporary reductions comply with budget rules that the bill cannot add to the deficit after 10 years.

Senate passage of the bill caused the Dow Jones industrial Average to react with a record high in Monday morning trading on Wall Street..It rose 250 points. The S&P 500 rose 0.8 percent, also reaching an all-time high. The Nasdaq exchange rose 0.6 percent.

Last-minute changes to the Senate bill included leaving the alternative minimum tax in place for corporations and an increased tax break for owners of partnerships, limited liability companies and other so-called "pass-through" businesses. That could have the effect of cutting the tax rate on some of the country's highest earners.

It also offers a 23 percent deduction on business income and would reduce federal revenue by an estimated $476.2 billion over the next decade. The House bill provides a different method for cutting those taxes that would reduce revenue by an estimated $596.6 billion.

Senate Majority Leader Mitch McConnell, R-Ky., said Sunday no guarantees can be offered to assure middle-class taxpayers of a tax cut.

"You can't craft any bill that would guarantee no one was in a special category that might get a tax increase. What I can tell you is that every segment of taxpayers, every category of taxpayers on average gets significant relief. Clearly most people, middle-income taxpayers, an overwhelming majority of them, will get tax relief," McConnell told CBS News.